Mumbai, Dec. 21 -- In a series of flip flops, the Reserve Bank of India (RBI) on Wednesday removed restrictions on customers depositing old notes in excess of Rs5,000. An RBI circular said banks will not be questioning customers depositing old notes if their accounts are compliant under know your customer (KYC) norms.
The central bank, which had issued these guidelines on Monday, had stated that deposits in old notes of Rs500 and Rs1,000 denomination in excess of Rs5,000 can be credited to an account only once by 31 December, that too after the depositor satisfactorily explains the reason behind the delay in depositing the money. The decision had come as a surprise as the government had promised that enough time is available to deposit old notes.
"The credit in such cases shall be afforded only after questioning the tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised in CBS to that effect so that no more tenders are allowed," said RBI in its 19 December notification.
"Even when tenders smaller than Rs5,000 are made in an account and such tenders taken together on cumulative basis exceed Rs5,000 they may be subject to the procedure to be followed in case of tenders above Rs5,000, with no more tenders being allowed thereafter until 30 December 2016, RBI had added.
On Wednesday, the RBI removed this restriction too.
However, the restrictions on deposits in non-KYC compliant accounts still hold. Customers can deposit up to Rs50,000 in these accounts before 31 December. But the restrictions are not applicable in the case of old notes deposited under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.
Published by HT Syndication with permission from MINT.